Partner Comms Q1 profit jumps on lower operating, finance costs
TEL AVIV May 14 (Reuters) - Partner Communications , Israel's second-largest mobile phone operator, posted a 68 percent jump in quarterly profit partly due to cost-cutting measures implemented in the wake of tough competition that has sent calling rates tumbling.
Net profit rose to 52 million shekels ($15 million) in the first quarter from 31 million a year earlier, above an estimate of 46 million shekels in a Reuters poll of analysts.
Finance costs decreased by 51 percent in the quarter due to lower interest expenses while operating expenses fell 8 percent.
Revenue declined 4 percent to 1.103 billion shekels. Revenue from equipment sales in the quarter grew by 24 percent.
Partner recorded a 2 percent rise in adjusted EBITDA, the first increase since the fourth quarter of 2010.
"The improvement resulted from adapting our cost structure to our challenging business reality, as well as the activity of our retail division which contributed to the growth in equipment sales," Chief Executive Haim Romano said.
Rates for mobile services have more than halved in Israel since the entry of new providers, who offered unlimited calling plans for as little as $25 a month.
In 2013, Partner - which operates under the Orange brand name - launched a new 3.5 generation network and invested in a 4G LTE network, which will be deployed in 2014.
Israel's telecoms regulator is creating a wholesale market that will allow Partner and others to offer TV and other services by leasing the lines from Bezeq Israel Telecom and cable company HOT.
"We expect to receive during the next quarters the required regulatory approvals for our network sharing agreement with HOT Mobile, although the full impact of the agreement on our financial results will only begin in 2015," Romano said.
Partner's subscriber base was unchanged in the quarter at 2.94 million. ($1 = 3.4565 Israeli Shekels) (Reporting by Tova Cohen)
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